COVID-America: 84,136 Dead, 36 Million Jobless, Nasdaq +30%

COVID-America: 84,136 Dead, 36 Million Jobless, Nasdaq +30%

Tyler Durden

Thu, 05/14/2020 – 08:34

The string of unprecedentedly huge spikes in jobless claims continues. In the last week 2.98 million Americans filed for unemployment benefits for the first time (notably worse than the 2.50 million expected).

Source: Bloomberg

The small difference WoW suggests a second wave of unemployment is hitting…

That brings the eight-week total to 36.47 million, which is massively worse than the prior worst eight-week period in the last 50-plus years.

And of course, last week’s “initial” claims and this week’s “continuing” claims… the highest level of continuing claims ever

Source: Bloomberg

Connecticut saw a massive surge in initial jobless claims last week (we suspect this is more systems catch up than a sudden resurgence)…

And as we noted previously, what is most disturbing is that in the last eight weeks, far more Americans have filed for unemployment than jobs gained during the last decade since the end of the Great Recession… (22.13 million gained in a decade, 36.47 million lost in 8 weeks)

Worse still, the final numbers will likely be hurt even more due to the bailout itself: as a reminder, the Coronavirus Aid, Relief, and Economic Security (CARES) Act, passed on March 27, could contribute to new records being reached in coming weeks as it increases eligibility for jobless claims to self-employed and gig workers, extends the maximum number of weeks that one can receive benefits, and provides an additional $600 per week until July 31. A recent WSJ article noted that this has created incentives for some businesses to temporarily furlough their employees, knowing that they will be covered financially as the economy is shutdown. Meanwhile, those making below $50k will generally be made whole and possibly be better off on unemployment benefits.

As Mises’ Robert Aro noted earlier in the week, the stimulus packages being handed out across this world provide us with an opportunity to document the anticapitalist process as it unfolds in real time, keeping in mind that when these inflation schemes fail, it will likely be blamed on capitalism.

The combination of increasing the money supply in order to pay people not to produce goods or services has consequences that not a lot of people are talking about.

It flies in the face of the free market and is as nonsensical as a negative interest rate. A loan that is forgivable is unconventional to say the least, because a loan is normally defined as an amount borrowed that is expected to be paid back with interest. When a loan is given on a first-come-first-served basis for the purpose of paying people not to work and is forgivable because it’s guaranteed by the United States government, we shouldn’t call it a loan.

It may be called socialism, maybe interventionism, and some may still prefer the term statism; but one thing is certain when it comes to the Paycheck Protection Program: it’s not capitalism!

Welfare cliffs are of course not the only reason so many capable Americans languish in partial dependency on government assistance. Dreadful government schools in poor areas and systematic obstacles to getting a job, such as minimum wage laws and occupational licensing laws, are also to blame. But the perverse incentives of America’s welfare system really hurt, and the CARES Act may have been a serious tipping point.

But, hey, there’s good news… well optimistic headlines as Treasury Secretary Steven Mnuchin said he anticipates most of the economy will restart by the end of August.

Finally, it is notable, we have lost 314 jobs for every confirmed US death from COVID-19 (784,136).

Was it worth it? Well of course it was – US equity markets are roaring higher (though the last 3 days reality may be starting to set in again)…

via ZeroHedge News https://ift.tt/3cB8YOk Tyler Durden

Taibbi: How The COVID-19 Bailout Gave Wall Street A No-Lose Casino

Taibbi: How The COVID-19 Bailout Gave Wall Street A No-Lose Casino

Tyler Durden

Thu, 05/14/2020 – 08:26

Authored by Matt Taibbi via RollingStone.com,

In late April Marko Kolanovic, a financial analyst for JPMorgan Chase, wrote to clients with good news. Pandemic aside, investors should expect stock prices in S&P 500 companies to return to record numbers some time early next year!

“The S&P 500 should attain previous all-time highs,” Kolanovic wrote, “if the monetary measures are sustained.”

The key part of this phrase was the last bit, “if the monetary measures are sustained.” In countries that did not have a Federal Reserve Bank shooting a bazooka of cash daily at Wall Street, Kolanovic suggested the coronavirus would result in a 30 percent decline in the present value of earnings.

In other words, without intervention by the Federal Reserve, the United States in the coronavirus era would be looking at a Depression-level contraction.

Assuming the Fed bazooka keeps firing, however, a large portion of the investor class is already on a road leading back to champagne and confetti. And that, as Robert Frost would say, has made all the difference.

On the road more traveled, on the real side of the coronavirus economy, the pain has been historic. As of this writing, 30 million people have filed jobless claims during the COVID-19 crisis, and millions have lost their employer-based insurance.

At least one in three can’t make their rent, millions more can’t afford groceries, and workers in supermarkets, medical clinics, warehouses, and other professions are now in a macabre race to see if they’ll turn blue and die before corporate employers decide to slash their salaries or retirement benefits — which has already happened to front-line caregivers in some cities.

There are no projections of record earnings in the futures of such people. The best case is survival, and the grim reality of diminished economic horizons. Yet for the tiny sliver of people whose fortunes depend not on salaries, tips, and commissions, but upon the prices of financial products like stocks and bonds, the coronavirus response heralds a brave new world.

The $2.3 trillion CARES Act, the Donald Trump-led rescue package signed into law on March 27th, is a radical rethink of American capitalism. It retains all the cruelties of the free market for those who live and work in the real world, but turns the paper economy into a state protectorate, surrounded by a kind of Trumpian Money Wall that is designed to keep the investor class safe from fear of loss.

This financial economy is a fantasy casino, where the winnings are real but free chips cover the losses. For a rarefied segment of society, failure is being written out of the capitalist bargain.

This is a fresh take on a long-developing dynamic. Dating to the late Eighties, when then-Fed-chief Alan Greenspan slashed interest rates after the 1987 stock-market crash, there’s been an understanding that the government would be there to help Wall Street back on its feet in hard times.

That belief was so strong it had a name: the “Greenspan put.” Bloomberg’s Tim Duy defines the term as “the implied promise that central bankers led by Fed Chairman Alan Greenspan would bail out market participants who indulged in risky behavior.”

The Fed stepped in to flood Wall Street with cash (these are called “liquidity injections”) after a series of messes in the Clinton and Bush years, from the Asian-currency debacle to the collapse of the Long-Term Capital Management hedge fund in the late Nineties to a deflation panic in 2002.

A prolonged period of liquidity injection in the early 2000s prompted a now-familiar pattern of pushing investors out of traditional safe-haven investments (the low interest rates punished savers) and into ever-riskier gambles in commodities, stocks, and the housing markets.

All three arenas saw bubbles, but the one in the U.S. housing market burst after an orgy of Ponzi-style scheming sent mortgage prices shooting through the roof. In the space of a few months in 2008, the pension funds and municipalities that had been urged by greed-sick bankers to invest in a “real estate boom” (actually a fraud-driven speculative bubble) lost fortunes.

Taxpayers and homeowners bore nearly 100 percent of the pain. Nearly 3 million people filed for foreclosure in 2010 alone. Back then, the notion of using state funds to rescue these folks was rejected as laughable, a dangerous “moral hazard.” As billionaire Charlie Munger put it in 2010, homeowners needed to “suck it in and cope,” and not wait for a handout.

Wall Street, though, got the mother of all rescues. The response wasn’t limited to a traditional liquidity injection. Banks were given trillions in bailouts and emergency loans, allowed to dump years of bad investment decisions into special garbage facilities set up by the Federal Reserve, and urged to “drink themselves sober” through years of free money from a zero-interest-rate policy.

The Fed, beginning in late 2008, added a new crisis-response tool called quantitative easing (QE), a fancy academic name for printing trillions of dollars and using it to buy everything from mortgages to government debt. This was with the ostensible aim of increasing “the availability of credit” for things like home purchases, but also to “foster improved conditions in financial markets more generally.”

The dubious underlying logic was that rescuing the economy and rescuing the financial markets were the same thing. To save people, we had to save the economy in which they operate, which meant saving the high-risk investments of Wall Streeters, as much as they might suck.

What’s happening in the COVID-19 crisis is the next step: a financial bubble where the Fed isn’t the cleanup mechanism, but the source of the mania itself. While the real economy is seeing record disruptions, Wall Street has seen prolonged rallies of “rational exuberance” over the Fed’s decision to usher in “QE infinity” and essentially ban losing in finance capitalism.

Though this is a Trump bill — El Pompadour is so determined that the CARES Act be remembered as his work, he fought to get his signature on relief checks — it passed unanimously, by voice vote in the House, and 96-0 in the Senate.

Talk to Democrats on the Hill and they will tell you this is a bailout to be cheered and supported, nothing like the 2008 rescue. This time is different, the argument goes: Three-quarters of the money goes to real people.

This is true, if one squints and uses a narrow definition of “money.” The $2.3 trillion imagines $560 billion for “individuals” (including $300 billion in cash payments, much by way of the famed $1,200 “Trump” checks), plus $377 billion for small businesses, as well as $339 billion for state and local governments, and $100 billion for hospitals and other health care providers, plus some aid for students and children.

Technically, “only” about $500 billion of the congressionally passed rescue package goes to “big business.” Moreover, the big-business aid ostensibly comes with a range of draconian-sounding conditions barring greedy hijinks, meaning no layoffs, no stock buybacks, no big bonuses, etc., if companies want the handout.

The loophole comes via $454 billion created as part of that big-business package. This “emergency fund” will be dumped into a “special-purpose vehicle” used to backstop further lending by the Federal Reserve.

That $454 billion is designed to grow by a factor of 10 or more. “We can lever up to $4 trillion,” said Steve Mnuchin, playing the “free-spending Goldman Sachs-trained Treasury secretary” role that apparently is a prerequisite for financial-disaster narratives in modern America.

Democrats early on expressed concern about old-school Tammany Hall-style graft, i.e., that the fund would be used to invest in businesses with connections. “We’re not here to create a slush fund for Donald Trump and his family,” is how Elizabeth Warren put it.

However, once Democrats won superficial oversight concessions (including the creation of a Congressional Oversight Commission), Warren and everyone else in the caucus approved the “slush fund” concept, despite the far more radical issues it poses than individual graft.

The CARES Act “slush fund” imagines a future in which markets for all financial products are stressed, perhaps permanently, by lockdowns. In place of a heartless free market of panicked investors who might want to cut their losses and sell, the plan is to simulate real buying and selling of financial products like mortgages and bonds with directed deployments of the Fed’s endless trillions.

And they will be endless. As Fed chief Jerome Powell put it, the Fed is “not going to run out of ammunition” in the war against the economic crisis. Marcus Stanley of Americans for Financial Reform said, “The Fed’s perspective on this is, they want to create normalcy.” But what does “normal” mean in an economy that may be changed forever?

Investors were fleeing stocks, bonds, money-market funds, etc., in the first weeks of March for the perfectly logical reason that most businesses suddenly looked like dicey investments. But the instant the Fed announced its new purchasing programs, most of these markets bounced back nearly all the way up.

Major bond funds that were on the brink of failure on March 23rd — like BlackRock’s $30 billion LQD fund — rebounded and recovered nearly all of their value in the next days. The S&P 500 sank 34 percent in 23 trading sessions at the beginning of the crisis, then after the Fed’s announcement on March 23rd, rose 27 percent in its next 16 sessions. The NYSE Composite hit a low of 8,777 on March 23rd, then started a long march back up over 10,000 and then 11,000 from that day forward.

Investors have begun following the Fed. Analysts are encouraging clients to “buy what the Fed is buying,” because “the stimulus seems to be endless.” The boom isn’t in any particular kind of company or product, but in the Fed itself.

“The Fed is the market, and all the big players know it, while the real economy will stagger far behind,” is how Nomi Prins, author of Collusion and an expert on central-banking policy, puts it.

This plan is getting support from both the right and the left. Wall Street analysts are cheering Fed chief Powell’s decision to act “forcefully, proactively, and aggressively” to forestall financial collapse, while liberal economists seem to cheer the spectacle of the government abandoning harrumphing conservative rhetoric about fiscal restraint to invest massively in the economy.

“I’m more sympathetic than I might otherwise have been,” says noted progressive economist Dean Baker, adding that the extraordinary crisis has created real trouble for a lot of good companies that the Fed’s actions will address.

Decades ago, America started down the road of creating two economic worlds. Our once-mighty brick-and-mortar economy went into decline and began to be exported overseas, to cheap labor zones and countries with less-stringent environmental laws — places that, as economist Larry Summers infamously put it, were “vastly underpolluted.” That American factory workers would be left behind by this process was just their bad luck, another thing requiring a “suck it in and cope” attitude.

Not so for their bosses, though, who were rescued from the decline by transitioning to even-more-profitable work in a new, “financialized” economy. This world emphasized making money by moving it around in the capital markets — prioritizing fees, interest, capital gains, etc. A generation of minds that were trained in the logic of “financialization,” and its underlying principles — which include the idea that workers are fungible, parasitic drains on the more crucial “wealth creators” above — accelerated the aggressive tilt to the political right by America’s wealthy in recent decades.

Even the experts at the Federal Reserve, whose official mandate includes attaining “maximum sustainable employment,” became more and more removed from their real-world purpose over the years, devoted instead to tending to the needs of this second, sandcastle economy over the problems of disenfranchised working people, whose fates mostly couldn’t be helped. And why not? What Fed official ever interacts with anyone not employed in the financial sector? How could the real world ever seep in?

The coronavirus bailout could end up being the last chapter in this hideous story. Although we’re seeing a graphic demonstration of how “unskilled” workers like home health aides and delivery people and grocery clerks are actually the vitally important people in our society, they’re not getting the radical rescue. There’s no sudden universal health care, no guaranteed sick leave, no massive jobs plan, just Band-Aids. They will die in massive numbers and emerge from this crisis, if and when it ends, poorer and more vulnerable than before.

But the financial markets are getting the World War II-style “whatever it takes” financial commitment, based upon the continuing fallacy that “wealth creators” must be the first in line for rescue in any crisis. This was a wrong assumption on the decks of the Titanic, a wrong assumption after 2008, and a criminally wrong assumption now.

Continuing belief in the trickle-down myth that has been destroying and dividing this country for decades will kill us faster than any pandemic. If we’re going to spend in “unlimited” amounts, let’s for once do it in the real world and for the people who need it most.

via ZeroHedge News https://ift.tt/2yYSvVF Tyler Durden

“The Bear Market Rally Is Over”: Futures Slide As Dollar Surges, Lifting Bonds

“The Bear Market Rally Is Over”: Futures Slide As Dollar Surges, Lifting Bonds

Tyler Durden

Thu, 05/14/2020 – 08:12

S&P futures slumped lower after Novartis CEO said a coronavirus vaccine may not be available until 2H 2021 and European stocks declined on Thursday as investors worried that the current economic downturn maybe be here for longer than initially presumed after Fed Chair Jerome Powell warned of unprecedented risks from the coronavirus, while waiting the latest American jobless data after another steep sell-off on Wall Street.

“Views are beginning to firm that the 2020 bear-market rally may have run its course,” said Perpetual Investment Management head of investment strategy Matthew Sherwood.

After two sessions of sharp declines, the three main US stock indexes slumped for a third day following a report that President Donald Trump is “looking at” Chinese companies that trade on American exchanges, and are now headed for their worst week since mid-March, as hopes of a quick economic recovery were dashed following sobering comments from Federal Reserve Chairman Jerome Powell and leading U.S. infectious disease expert Anthony Fauci.

Among early movers, Cisco Systems Inc rose 2.5% premarket after beating quarterly revenue and profit estimates, as lockdowns globally boosted demand for its remote-work tools and networking equipment.  Norwegian Cruise Line Holdings, the S&P’s worst performer since the sell-off began in February, rose in the premarket after saying there continues to be demand for cruise vacations, particularly beginning in the fourth quarter. The earnings season is in its final stretch with 448 S&P 500 companies having reported so far. On average, first-quarter earnings are expected to fall 12.2%, according to Refinitiv data.

The Stoxx Europe 600 Index fell, with insurance and auto shares among the biggest laggards. The Stoxx Europe 600 Basic Resources Index fell as much as 2.1%, as tensions between the U.S. and China flare up, while Fed warns about economic risk and Goldman Sachs sees iron ore falling. The big  four diversified miners all fell: Rio Tinto -1.2%, BHP -1.2%, Glencore -3.2%, Anglo American -3.5%.

Earlier in the session, Asian stocks fell, led by energy and finance, with Japan and Australia suffering some of the steepest falls after rising in the last session. The Topix declined 1.9%, with Sawafuji Elec and eRex falling the most. The Shanghai Composite Index retreated 1%, with Chahua Modern Housewares and Sailun Group posting the biggest slides

Emerging-market stocks and currencies weakened after Powell warned of unprecedented risks to the economy if policy makers fail to address the fallout from the coronavirus. MSCI’s measure of developing-nation equities resumed losses after a day of stability, while almost all currencies weakened against the dollar. Mexico’s central bank was forecast to cut its key rate by 50bps to the lowest since 2016 later in the day. Investors are assessing whether financial markets are adequately pricing the economic reality of a pandemic that’s shut down factories and prompted a surge in unemployment across the globe. The extra yield they demand to hold developing-nation debt instead of Treasuries climbed. “The chairman hit a nerve,” Commerzbank strategists including Frankfurt-based Ulrich Leuchtmann said in a note. “His speech provided a reason to allow already existing fears to take their course.”

The rally in global equities from March lows – which was driven by hopes of a pick up in business activity as several U.S. states eased lockdowns put in place to curb the spread of the coronavirus – is showing further signs of stalling this week amid comments from some big-name investors such as Druckenmiller and Tepper that stocks have run up too far amid the economic uncertainty. Fed Chairman Jerome Powell suggested that additional fiscal support could be needed to combat the effects of the pandemic. In that vein, Republicans rejected a $3 trillion stimulus measure drafted by House Democrats, but the draft plan has the seeds for an eventual, smaller compromise.

In FX, the biggest overnight mover was the dollar, which broke out of a descending triangle, jumping to the highest level since April 26. The Bloomberg Dollar Spot Index strengthened for a fourth consecutive session, rising alongside the yen, as souring market sentiment kept haven currencies in demand. The greenback’s advance continued against most of its G-10 peers amid risk-off moves in Asia and Europe after Federal Reserve Chair Jerome Powell warned of economic challenges from the coronavirus pandemic, and took negative rates off the table. “The downbeat message from Powell has contributed to more risk off trading conditions overnight which is also helping to support the U.S. dollar,” said Lee Hardman, currency analyst at MUFG.

Yesterday we explained why the next dollar surge may be only just starting as an avalanche of treasury issuance drains roughly $1 trillion in market liquidity.

The yen and Canadian dollar led gains among Group-of-10 currencies, while the euro hovered after slipping below 1.08 per dollar. The Swedish krona led losses and the Australian dollar weakened a fourth day against the greenback after the nation’s employment plunged by a record in April. The pound fell to a one-month low on weak risk sentiment and speculation over more central bank easing.

In rates, treasuries are bull-flattening for a third straight session, with long-end yields dropping back under 1.30% following solid demand for Wednesday’s 30-year bond auction. Treasuries also benefit from weakness in stocks after Novartis CEO said a coronavirus vaccine may not be available until 2H 2021. Treasury yields lower by more than 6bp at long end with 2s10s and 5s30s both flatter by more than 3bp; 10-year yield drops 4bps to 0.615%. European bonds mostly gained though underperformed Treasuries, amid fears of a lasting downturn. German Bunds are cheaper by 3bp vs. Treasuries, gilts wider by almost 4bp.

In commodities, WTI and Brent front-month futures remain on the front foot after a somewhat choppy APAC trading session, with fresh modest impetus across the complex derived from the latest IEA oil market report – which proved more optimistic vs. its OPEC and EIA counterparts. The agency cut their 2020 demand growth forecast by 690k BPD (vs OPEC’s 2.23mln BPD and EIA’s 2.9mln BPD) while stating that the decline in H1 oil demand is not as steep as originally feared – with an improvement in the balance seen amid deep production curbs and reopening economies, however, IEA Chief Birol stated that he does not believe the recently announced cuts (i.e Saudi, UAE, and Kuwaiti over-compliance) are enough to balance the markets.

To the day ahead now, the data highlight today will likely be the weekly US initial jobless claims. Meanwhile, there’s also be the final German CPI reading for April, Japan’s machine tool orders for April, the Italian trade balance for March and Canadian manufacturing sales for March. From central banks, Bank of England Governor Bailey will be speaking on a webinar, and we’ll also hear from the Fed’s Kashkari, Bostic and Kaplan, along with the ECB’s Vice President de Guindos. Finally, the ECB will be publishing their Economic Bulletin, while the Mexican central bank will be deciding on rates.

Market Snapshot

  • S&P 500 futures little changed at 2,813.50
  • STOXX Europe 600 down 1.7% to 328.36
  • MXAP down 1.4% to 144.70
  • MXAPJ down 1.3% to 465.75
  • Nikkei down 1.7% to 19,914.78
  • Topix down 1.9% to 1,446.55
  • Hang Seng Index down 1.5% to 23,829.74
  • Shanghai Composite down 1% to 2,870.34
  • Sensex down 2.5% to 31,205.67
  • Australia S&P/ASX 200 down 1.7% to 5,328.72
  • Kospi down 0.8% to 1,924.96
  • German 10Y yield fell 1.4 bps to -0.544%
  • Euro down 0.03% to $1.0815
  • Italian 10Y yield fell 8.7 bps to 1.628%
  • Spanish 10Y yield fell 1.7 bps to 0.718%
  • Brent futures up 2.6% to $29.96/bbl
  • Gold spot little changed at $1,716.54
  • U.S. Dollar Index little changed at 100.23

Top Overnight News

  • Germany recorded the highest number of new coronavirus cases in five days as the government gradually lifts restrictions on daily life
  • The coronavirus is threatening to turn the long- lasting fault line cleaving Europe between its richer north and poorer south into an economic chasm putting its currency at risk
  • The Bundesbank is talking to German authorities amid a stand-off over a controversial court ruling that questions the European Central Bank’s bond-buying program, ECB Executive Board member Fabio Panetta said
  • A change in the way Bank of Japan Governor Haruhiko Kurodatalks about the possibility of cutting the bank’s negative interest rate may suggest the option is now further down on the list of his favored tools
  • Activity is continuing to pick up in funding markets on both sides of the Atlantic, though in Europe pricing remains a sticking point as rates have advanced in high-grade commercial paper
  • The outlook for global oil markets has “improved somewhat,” with demand a little stronger than expected and supply reined in by a brutal price crash, the International Energy Agency said
  • Roche Holding AG’s coronavirus antibody test was cleared by a U.K. health authority, a boost to Prime Minister Boris Johnson as he seeks ways to gradually relax lockdown restrictions
  • While the rest of the world has sheltered at home, Swedes have continued eating in restaurants, shopping, and going to work. The Swedish model trades more disease for less economic damage

Asian stocks traded negatively with global risk appetite dampened by ongoing US-China tensions and ongoing questions about reopening efforts. ASX 200 (-1.7%) was led lower by energy and financials after similar underperformance of the sectors stateside and with participants digesting alarming employment data that showed a near-600k decline in jobs. Nikkei 225 (-1.7%) remained under the influence of a firmer currency and with earnings releases also providing a catalyst for price action including Sony. Elsewhere, Hang Seng (-1.5%) and Shanghai Comp. (-1.0%) were both downbeat as US-China tensions turned up a notch after source reports noted China will soon impose countermeasures on those seeking COVID-19 damages from China and after US President Trump extended the executive order protecting the US supply chain from Huawei and ZTE for an additional year, while the PBoC also disappointed expectations for an MLF announcement and associated 20bps rate cut which both failed to materialize. Finally, 10yr JGBs were initially higher as prices benefitted from the risk aversion and gains in T-notes, but with upside later reversed after a mixed 30yr auction which resulted in lower accepted prices.

Top Asian News

  • New Zealand Projects Surging Debt on Historic Fiscal Stimulus
  • Russia Outbreak Spreads to Neighbor With Jump in Mongolian Cases
  • Australian Equities Drop as Employment Slumps by Most on Record
  • Kuroda Hints Cutting Rates May Now Rank Lower in BOJ Toolkit

Europe has taken the downbeat lead from the APAC session (Euro Stoxx 50 -1.9%) as rising tensions between US and China continue to weigh on sentiment, whilst Fed Chair Powell’s heavy downplaying of NIRP does not aid the equity complex. Major bouses see broad-based losses with no real stand-out across major indices. Sectors reside firmly in the red across the board with steeper losses seen in cyclicals (ex-telecoms). The sector breakdown sees Auto and Parts alongside Travel & Leisure as the laggards. Telecommunications reside at the top of the list – losses in the sector are cushioned by earrings from Deutsche Telekom (+0.6%) who topped Adj. EBITDA estimates, confirmed guidance, and said the outbreak is having a limited impact on Co’s financials. Sticking with German earnings, Merck (+1.1%) remains underpinned after topping estimates on all Q1 metrics, whilst guidance printed in-line with analyst estimates. Other earnings-related DAX constituents include: Wirecard (-0.7%), RWE (-0.7%). Elsewhere, Fiat Chrysler (-1.7%) and PSA (-1.1%) are pressured after simultaneously pulling FY20 dividend; the dividend was a component of their merger. Finally, Roche (+0.2%) remains afloat after its COVID-19 antibody test had been approved by Public Health England. Co. is in talks with the NHS and the UK government regarding a phased roll-out of tests as soon as possible. UK government is in negotiations to purchase millions of kits.

Top European News

  • Nosediving German Economy Isn’t Just Suffering Amid Virus
  • BMW Faces Shareholder Scrutiny Over $1.8 Billion Dividend
  • U.K. Virus Fight Boosted by Clearance of Roche Antibody Test
  • U.K.’s Housing Revival Plan Seen Unlocking $100 Billion of Deals

In FX, we start with the AUD/NZD: Not quite role reversal, but the pecking order has changed down under to an extent following a near 600k plunge in Aussie payrolls, a marked rise in the participation rate and predictions for more pronounced jobs market pain to come. Aud/Usd has duly pulled back further from 0.6500+ peaks to pivot 0.6450 and Aud/Nzd is losing momentum below 1.0800 even though the Kiwi remains under pressure post-RBNZ on heightened NIRP expectations and the NZ Government boosting its COVID-19 recovery fund to the tune of 20% of GDP. Indeed, Nzd/Usd has now lost grip of the 0.6000 handle ahead of April’s manufacturing PMI.

  • JPY – The Yen continues to buck the overall trend and outperform an otherwise strong Dollar, with the DXY looking more comfortable above 100.000 within a 100.420-140 range, as risk-off positioning intensifies and keeps Usd/Jpy capped on advances through 107.00. No adverse reaction to more dovish rhetoric from BoJ Governor Kuroda balanced with the unflinching belief that Japan will not return to deflation and it is not necessary to ease benchmark rates further even though recession will continue in Q2.
  • GBP/SEK/NOK – The Pound continues to fall victim to bearish historical patterns and increasingly negative technical impulses as Cable relinquished another round number at 1.2200 to test deeper support ahead of 1.2150 (circa 1.2166) before finding underlying bids, with perhaps some fundamental weakness emanating from BoE Governor Bailey acknowledging that markets are anticipating more QE. Meanwhile, the aforementioned risk aversion has knocked the Swedish Krona out of its stride and back under 10.6000 vs the Euro, but firm crude prices following a less downbeat IEA monthly report in terms of global demand destruction are helping Eur/Nok in a downward trajectory near 11.0000, albeit off Wednesday’s sub-10.9250 two month lows.
  • CAD/CHF/EUR – Buoyant oil is also underpinning the Loonie either side of 1.4100 vs its US counterpart in the run up to the BoC’s FSR, while the Franc is back in a bind or divergent position given Usd/Chf holding above 0.9700 in contrast to Eur/Chf edging back down towards 1.0500, as the single currency straddles 1.0800 against the Greenback after light stops were tripped at the big figure, but not larger ones said to be sitting beneath at 1.0775. Note, Eur/Usd is shrouded in a cluster of big option expiries today spanning 1.0750 to 1.0930 – check out the headline feed at 7.23BST for full details and the other major strikes in play.
  • EM – Not even the deteriorating mood amidst heightened COVID-19 2nd wave and US-China relations or rising crude costs can dent the Try’s ardour it seems, as the Lira remains above 7.0000 and drawing traction currently from hopes that the CBRT can arrange swap lines with foreign peers..

In commodities, WTI and Brent front-month futures remain on the front foot after a somewhat choppy APAC trading session, with fresh modest impetus across the complex derived from the latest IEA oil market report – which proved more optimistic vs. its OPEC and EIA counterparts. The agency cut their 2020 demand growth forecast by 690k BPD (vs OPEC’s 2.23mln BPD and EIA’s 2.9mln BPD) while stating that the decline in H1 oil demand is not as steep as originally feared – with an improvement in the balance seen amid deep production curbs and reopening economies, however, IEA Chief Birol stated that he does not believe the recently announced cuts (i.e Saudi, UAE, and Kuwaiti over-compliance) are enough to balance the markets. Elsewhere, Saudi Arabia has reportedly cut oil sales by half to the US & Europe, deeper cuts than for Asia, as output has been reduced, according to sources. Shipments to some US and European buyers will fall by 60-70% vs. normally contracted volumes. This comes in the context of Aramco raising OSPs across the regions, lower sales to Europe and the US could be a function of the lower demand from lockdowns. Aside from that, news-flow has been light for the complex – WTI June resides around session highs north of USD 26/bbl (vs. low 25.18/bbl), whilst Brent July similarly sees itself north of USD 30/bbl (vs. low 28.88/bbl). Elsewhere, spot gold remains relatively flat north of USD 1700/oz and around the middle of today’s tight USD 1712-1719/oz range awaiting fresh macro stimulus or Dollar action. Copper prices meanwhile tracked losses across equities alongside the soured sentiment, and reside in proximity to USD 2.400/lb, having tested support at USD 2.3350/lb earlier in the session.

US Event Calendar

  • 8:30am: Initial Jobless Claims, est. 2.5m, prior 3.17m; Continuing Claims, est. 25.1m, prior 22.6m
  • 8:30am: Import Price Index MoM, est. -3.2%, prior -2.3%; Import Price Index YoY, est. -7.35%, prior -4.1%
  • 8:30am: Export Price Index MoM, est. -2.3%, prior -1.6%; Export Price Index YoY, prior -3.6%
  • 9:45am: Bloomberg Consumer Comfort, prior 36.9

DB’s Jim Reid concludes the overnight wrap

Yesterday we published Konzept – DB Research’s magazine. You can see it here. The theme of this edition is “Life after Covid-19” where we look at twenty articles covering how the world will be different going forward. We cover macro and micro themes as well as how the post virus landscape will change your life.

One of the lead features concerns whether this virus will end up being deflationary or inflationary. It’s fair to say that this argument splits DB Research like few others. To give you a feel for the debate we included the opposing views across two conflicting articles in the magazine. On this we have this morning launched a podcast (in our Podzept series) where I moderate a discussion between the lead authors. We have Robin Winkler in the red corner fighting for his deflationary views and Oliver Harvey in the blue corner countering with his inflationary views. You can listen here or you can subscribe to Podzept on Spotify, Apple & Google Podcast and Stitcher – simply search for Podzept.

In our monthly sentiment survey you can vote as to whether you think this crisis will be inflationary or deflationary. The survey has many other questions about your views on how the virus is impacting your life and the world around you. We also include market related questions. This link is here and the results will be published over the next few days.

As markets continue to grapple with what “Life after Covid-19” might look like, it was another weak day yesterday, with global equity markets falling further. We just about managed to cope with a downbeat assessment from Fed Chair Powell but couldn’t after additional evidence that the US/China relationship is souring further.

On the latter President Trump initially tweeted that “dealing with China is a very expensive thing to do. We just made a great Trade Deal, the ink was barely dry, and the World was hit by the Plague from China. 100 Trade Deals wouldn’t make up the difference – and all those innocent lives lost!” This was followed by China Global Times headlines saying that China is “extremely dissatisfied” with the possibility of the US sanctioning or otherwise punishing China over the coronavirus epidemic and would look to retaliate and were “mulling punitive countermeasures on US individuals, entities and state officials like Missouri’s attorney general, who filed lawsuits against China in seeking damages over the coronavirus pandemic.” This was all prior to a Bloomberg report saying that the Federal Retirement Thrift Investment Board in the US, a savings plan for federal employees, would not be allocating roughly $50 billion of its international fund to track an MSCI All Country World Index, capturing China. The move was reportedly backed by the President’s administration and some members of Congress.

Adding to the negative US/China news, the high profile founder of Appaloosa Management, David Tepper, called the US stock market the most overvalued that he had ever seen outside of the tech bubble in 1999, calling some tech valuations “nuts”. These comments mirrored those of fellow seasoned investor Stan Druckenmiler the day before. He called the risk-reward of equities the worst he had seen in his career. Tepper also questioned whether there have been misallocations of capital following the actions of the Fed, but also acknowledged that the stock market may not retest the March bottoms.

In terms of the moves, equity indices fell across the board with the S&P 500 down -1.75% and the NASDAQ also down -1.55%. Even though the market rallied nearly one percent in the last 30 minutes of trading this was still the first time in over 3 weeks that we’ve seen the S&P fall by more than 1% for two days in a row, while the VIX index climbed +2.2pts to its highest level in over a week. European bourses also experienced sustained declines, with the STOXX 600 down -1.94% and the DAX losing -2.56%.

Asian markets have followed in tow this morning with the Nikkei (-0.86%), Hang Seng (-1.11%), Shanghai Comp (-0.47%) and Kospi (-1.00%) all down. Elsewhere futures on the S&P 500 are trading flat while yields on 10yr USTS are down -1.1bps. In other overnight news, Saudi Aramco announced a cut in contractual volumes for June loading to at least eight Asian customers, signaling that the country might be adhering to the announced production cuts. WTI oil prices are up +0.55% as we type.

Fed Chair Powell in his hotly anticipated address yesterday warned that the outlook was “both highly uncertain and subject to significant downside risks.” Though Powell’s conclusions will probably come as no surprise, what was notable from his remarks was how he dwelled for some time on the permanent effects that a recession of such a large magnitude can have, commenting that they “can leave behind lasting damage to the productivity capacity of the economy.” So markets certainly had some pretty negative headlines to ponder. When it came to future policy, he said that “we will continue to use our tools to their fullest until the crisis has passed and the economic recovery is well under way”, and that “additional fiscal support could be costly, but worth it if it helps avoid long-term economic damage and leaves us with a stronger recovery.”

The main takeaway however was on negative rates, where Powell said that the FOMC’s views hadn’t changed and that it wasn’t something they were looking at. Following the remarks however, Fed funds futures are pricing negative rates in Jan 2021 on Bloomberg’s WIRP page.

With investors moving out of risk assets into safe havens, sovereign debt rallied yesterday on both sides of the Atlantic, with yields on 10yr Treasuries down by -1.3bps to 0.653%, and those on bunds also falling by -2.5bps. Fed Chair Powell’s comments did not seem to have too much influence on yields given 10yr yields did not move until the risk off tone hit all assets slightly later in the US session. There was a tightening in peripheral spreads in Europe, with those on ten-year Italian (-6.3bps), Spanish (-2.8bps), Portuguese (-5.4bps) and Greek (-3.7bps) debt all moving tighter over bunds. And over in the UK, 2-year gilt yields fell to a record low of -0.03%.

Late last night news came out of Italy that the government has approved a €55bn fiscal stimulus package, which will focus on liquidity for small businesses and individual loans. As much as 15 billion will be set aside for companies to pay workers currently on furlough, with additional emergency funds for the unemployed. There will also be roughly €4bn in tax cuts for Italians as well as a €500 bonus for some to use on holiday spending for some. The Italian stimulus plan came alongside news that BoE Governor Bailey said that additional bond purchases would be coming. He acknowledged that it is “pretty clearly” investors expect more QE and that the central bank has kept the option open to do more. There was also a bit more acknowledgment that the BoE are effectively financing the deficit for now and spreading the costs of the pandemic over time. Previously the BoE have been a bit more hawkish on acknowledging that they are effectively financing the government.

When it comes to the short-term path of the economy, economists will be paying close attention to the initial weekly jobless claims report today from the US covering the week through 9 May. This is the first since last Friday’s April jobs report confirmed that the US now has its highest unemployment rate since the Great Depression, at 14.7%, and unfortunately it’s likely that we haven’t seen the worst of that yet. In terms of today’s claims number, the call from our US economists is for a 2.503m reading, which would mark the 6th week in a row that the number has declined, down from a peak of 6.867m in the week to March 27th. However, even if you benchmark it from the pre-Covid total number of nonfarm payrolls, that implies we’re still seeing well over 1% of the workforce making initial claims in a single week.

The economic data yesterday begun with figures that showed GDP had contracted by -2.0% in Q1 (vs. -2.6% expected), which is the largest quarterly decline for the UK economy since Q4 2008. Unsurprisingly, the real damage was evident once the lockdown had begun in March, with a month-on-month decline of -5.8% (vs. -7.9% expected), in contrast to +0.1% growth in January and a -0.2% contraction in February. Furthermore, that’s the worst monthly contraction on record in monthly data that goes back to 1997.

Wrapping up with yesterday’s other data, and Euro Area industrial production fell by -11.3% in March (vs. -12.5% expected), which was the biggest monthly decline since the formation of the single currency back in 1999. Meanwhile US producer prices fell by -1.3% month-on-month in April (vs. -0.5% expected).

To the day ahead now, and the data highlight today will likely be the weekly US initial jobless claims. Meanwhile, there’ll also be the final German CPI reading for April, Japan’s machine tool orders for April, the Italian trade balance for March and Canadian manufacturing sales for March. From central banks, Bank of England Governor Bailey will be speaking on a webinar, and we’ll also hear from the Fed’s Kashkari, Bostic and Kaplan, along with the ECB’s Vice President de Guindos. Finally, the ECB will be publishing their Economic Bulletin, while the Mexican central bank will be deciding on rates.

via ZeroHedge News https://ift.tt/3fNeK1o Tyler Durden

Second Amendment Challenge to N.J. Gun Range Closure

From the motion for a preliminary injunction in Ricci v. Murphy (D.N.J.) (filed yesterday by Dan Schmutter of Hartman & Winnicki and David H. Thompson, Peter A. Patterson, and Steven J. Lindsay of Cooper & Kirk), which challenges the inclusion of gun ranges in the New Jersey Governor’s business closure order:

The right to self-defense is “the central component of the [Second Amendment] right,” Heller, 554 U.S. at 599 (emphasis added), and it is “a basic right, recognized by many legal systems from ancient times to the present day,” McDonald, 561 U.S. at 767. Indeed, the right to self-protection and self-preservation was viewed at the Founding as a natural right that predates government and is necessarily reserved to the people when government is established. See Heller, 554 U.S. at 593–94 (citing, e.g., 1 William Blackstone, Commentaries 136, 139–40 (1765)). The importance of the right to self-defense is shown in sharp relief in times of national emergency, such as the present pandemic, when ordinary social routines, practices, and safeguards begin to break down.

The COVID-19 outbreak, and our society’s response, have upended social life as we know it, calling into question basic governmental functions and protections that are ordinarily taken for granted. Across the country, for example, police departments have been forced to “make[] major operational changes in preparation for the continued spread of coronavirus, as they face potential strains in resources and staffing without precedent in modern American history.” Alexander Mallin & Luke Barr, Police Implement Sweeping Policy Changes To Prepare for Coronavirus Spread, ABC News (Mar. 18, 2020), https://abcn.ws/3bl7sij (attached to Schmutter Decl. as Exhibit 14).

Those measures include reducing police response to certain types of crimes and announcements that certain criminal laws will simply not be enforced at the present time. Id. Hundreds of police officers in New Jersey have already been infected by COVID-19, and thousands more have been forced to quarantine. See Alex Napoliello, 645 N.J. Cops Have Tested Positive for Coronavirus, Another 2,300 in Self-Isolation, N.J.com (Apr. 13, 2020), https://bit.ly/2ziCgT8 (attached to Schmutter Decl. as Exhibit 15). Indeed, many States—including New Jersey, as well as California, New York, Ohio, and Texas—have taken the extraordinary and unprecedented step of releasing thousands of inmates into the public, due to the coronavirus outbreak. Lucas Manfredi, Jails Release Thousands of Inmates To Curb Coronavirus Spread, Fox Business (Mar. 22, 2020), https://fxn.ws/2UtPRxG (attached to Schmutter Decl. as Exhibit 16); Tracey Tully, 1,000 Inmates Will Be Released From N.J. Jails to Curb Coronavirus Risk, N.Y. Times (Mar. 23, 2020), https://nyti.ms/3akEZJd (attached to Schmutter Decl. as Exhibit 17).

The importance of safeguarding “the natural right of resistance and self-preservation,” Heller, 554 U.S. at 594, has never been higher than during this extraordinary moment of social upheaval and unprecedented strain on government resources. Hundreds of thousands of Americans across the Nation have come to the same conclusion: “Gun sales are surging in many U.S. states, especially in those hit hardest by the coronavirus—California, New York and Washington,” Kurtis Lee & Anita Chabria, As the Coronavirus Pandemic Grows, Gun Sales Are Surging in Many States, L.A. Times (Mar. 16, 2020), https://lat.ms/39kNVNt (attached to Schmutter Decl. as Exhibit 18), with dealers reporting “an unusually high proportion of sales … to first-time gun buyers,” Richard A. Oppel, Jr., For Some Buyers With Virus Fears, the Priority Isn’t Toilet Paper. It’s Guns., N.Y. Times (Mar. 16, 2020), https://nyti.ms/39gfRCc (attached to Schmutter Decl. as Exhibit 19)….

And indeed, these are exactly the circumstances that confront Plaintiff Ricci, who acquired her handgun only in March 2020, shortly after COVID-19 began its spread across the United States. Ricci Decl. ¶ 7. She has no prior experience with firearms of any kind but believes that the current emergency necessitates that she keep a handgun in her home for self-defense. Id. ¶¶ 6, 10. But merely possessing a handgun in the home is not the same as actually being able to use it with any level of effectiveness.

As Americans across the country are demonstrating, the basic, fundamental right of armed self-defense has never been more important than it is today. And as many Americans—including Plaintiff Ricci—are purchasing firearms for the first time in their adult lives, the need for firearm training has perhaps never been more acute. EO 107’s mandated closure of all shooting ranges in the State thus unquestionably burdens conduct protected by the Second Amendment….

There’s a lot more argument in the brief, of course; you can read it here.

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Could a judge be charged with perjury for breaking a promise made during a confirmation hearing?

Chiafalo v. Washington involved the so-called “faithless electors.” During the arguments, Justice Gorsuch asked Larry Lessig, if a faithless elector could be charged with perjury for violating a sworn oath:

JUSTICE GORSUCH: Counsel, could a State, for example, ask an elector to make a sworn statement as to his present intention to vote for a particular candidate, make the pledge an oath?

MR. LESSIG: Yes.

JUSTICE GORSUCH: And could a State later prosecute that elector for perjury if that statement under oath –if there’s evidence that that was a false statement?

I chuckled at Lessig’s answer:

MR. LESSIG: In principle, absolutely, Your Honor. We think, in practice, that would be just like with a Judge making a promise to a Senate committee upon confirmation –prior to a confirmation, it would be incredibly difficult to imagine enforcing in a way that wouldn’t just be retaliatory against a particular elector.

In other words, a perjury prosecution would really be a pretext for a vote the judge cast.

Remember, promises made to Susan Collins are not enforceable.

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Justin Amash’s Confusing and Contradictory Immigration Record

The Libertarian Party (L.P.) has always stuck up for mobility rights unencumbered by political barriers—in other words, for open borders. If its commitment to economic freedom has distinguished it from the Democratic Party, its commitment to the freedom of movement (along with civil liberties and reproductive rights) has distinguished it from the Republican Party. “A truly free market requires the free movement of people, not just products and ideas,” the party platform’s immigration plank declares.

So one key question for the five-term Michigan Rep. Justin Amash, a former Republican who recently joined the L.P., is whether he will advance this commitment or dilute it if he succeeds in getting the party’s presidential nomination. He called out President Donald Trump’s hateful anti-immigrant rhetoric when his erstwhile Republican comrades either stayed silent or played along. When Trump called immigrants “invaders” and contemptuously told Rep. Ilhan Omar (D–Minn.)—who emigrated from Somalia as a child—to return “home,” Amash voted in favor of a resolution condemning these comments.

But his voting record on legislation and explanations for his votes paint a mixed picture at best. Despite his well-deserved reputation as one of those rare politicians who puts principle above party or president, he’s got a maddening habit of splitting the baby when it comes to immigration. He’s certainly less restrictionist than every Republican out there right now, including even self-styled Trump nemesis Sen. Mitt Romney (R–Utah), who during his own failed presidential bid in 2012 mused about making life so miserable for undocumented immigrants that they’d “self-deport.” But notwithstanding Amash’s other virtues, he seems less pro-immigration than his libertarian rivals.

This was evident during Saturday’s L.P. presidential debate in Kentucky, when Jacob Hornberger, the founder of the libertarian think tank Future of Freedom Foundation, raved about the party’s 1990 platform that unambiguously called for the “elimination of all restrictions on immigration [and] the abolition of the Immigration and Naturalization Service and the Border Patrol.” He castigated Amash, noting that the congressman claimed to “love free enterprise” but went along with the “evil, immoral, socialist, central planning, Republican-Democratic system of immigration controls which has brought death and suffering to countless people” and resulted in a “brutal police state consisting of highway checkpoints and other initiations of force against innocent people.” Meanwhile, Jo Jorgensen, the 1996 L.P. nominee for vice president, promised to “immediately stop construction on President Trump’s border wall boondoggle, and work to eliminate quotas on immigration so that anyone who wishes to come to America could do so legally.” She asked Amash point blank if he would do the same. He refused to answer—just as he did repeated requests from Reason for an interview for this piece.

In public comments two years ago, Amash noted that it is “important” for America to remain a “welcoming country” where immigrants like his dad, a Palestinian refugee from Ramallah, “feel they have the opportunity to come and start a new life.” A few weeks ago, he told Reason‘s Nick Gillespie that he “supports immigration” and wants to “fix our immigration system so that people can come here lawfully.”

Still, when he was a Republican in Congress, he too often ended up on the pro-immigration side for narrow procedural reasons, not fundamental principled ones. Indeed, Amash repeatedly said he agreed with several restrictionist ends and disagreed merely with the means deployed to achieve them.

In a 2013 letter Amash co-signed in support of Sen. Rand Paul’s efforts to elevate the GOP’s tone on immigration (back before Paul found his inner restrictionist), Amash said that immigration reform should be treated like a “three-legged stool” that combined expanded legal immigration with enhanced border security by “both the physical border and the ‘virtual’ border of visa enforcement.” Last year, even as he became the sole Republican to join a Democratic bill to stop Trump from declaring a national emergency to seize funds to build his wall (while criticizing his fellow Republicans for trading “massive, wasteful spending” in exchange for wall funding), he assured everyone that he doesn’t “have an inherent objection to a border wall.”

As for visa enforcement, he says he’s “skeptical” of E-Verify, a program that requires employers to check whether their hires have work authorization against a federal database, because enforcing immigration laws is the government’s job and private businesses shouldn’t be asked to do it for them. But that opens the question of how far he is prepared to let the government go to do this job. Is it acceptable for the IRS to conduct audit raids (as it did under President Barack Obama) or for Immigration and Customs Enforcement (ICE) to conduct physical raids on businesses (as it did under Presidents George W. Bush and now Trump) to ferret out undocumented immigrants?

Amash’s record has also been mixed when it comes to defending sanctuary jurisdictions. Last year, he voted against the No Sanctuary for Criminals Act, a punitive law that sought to strip certain federal funds from sanctuary cities that refused to cooperate with Uncle Sam’s deportation efforts. But his objections did not center around anything morally objectionable about this particular bill, just that it went “too far.” In fact, he went out of his way to assert that in the past he had “voted to defund sanctuary cities.”

In the same vein, he voted against Kate’s Law, which was named after the California woman accidentally shot by an unauthorized immigrant who was later acquitted on murder charges. That law sought to strip immigrants accused of illegal reentry—a felony—of the right to challenge their removal order while they were being criminally tried. Amash, to his credit, noted that eliminating this right was unconstitutional. Yet he did not go so far as to question the criminalization of unauthorized entries in the first place, which should have been a no-brainer for a self-described small-l libertarian.

Among Amash’s most inspired actions as a congressman was his vote two years ago against a Republican plan to put Democrats on the spot by forcing them to vote on a resolution supporting ICE, an agency with a history of brutal border enforcement. So when Trump implemented his zero-tolerance border policies and started separating babies and other children from Central American migrant moms seeking asylum, the progressive left joined longstanding (and admittedly unpopular) libertarian calls to abolish ICE. The Republicans’ resolution tried to exploit that, praising the “heroic law enforcement officers who make sacrifices every day to secure our borders, enforce our laws, and protect our safety and security” and daring Democrats to vote against it. Amash condemned his fellow Republicans and demanded to know why a party that has historically counseled vigilance against an overweening federal government would “treat a federal agency as though its beyond reproach and reform.” But he did not go so far as to join calls to abolish ICE.

As for zero-tolerance border enforcement, all Amash could bring himself to say was that the government shouldn’t forcibly separate families seeking asylum in the United States “unless absolutely necessary.” One would be hard-pressed to find any statement by Amash noting why providing asylum was a humanitarian imperative, particularly for a nation founded by people fleeing persecution.

Also praiseworthy was Amash’s slam of Trump’s so-called Muslim travel ban in 2017, which barred entry for all refugees for 120 days and barred entry for foreign nationals from seven predominantly Muslim countries for 90 days. Even as most other Republicans stayed mum, Amash called the ban “unlawful” and “extreme.” He beseeched Trump to work with Congress if he wanted to change immigration law. But here again, Amash diluted his message by acknowledging the need for more vetting of refugees, despite the facts that refugees at the time were already being subjected to a multi-agency, multi-year review and that the number of Americans killed in a terrorist attack by a refugee since 1980 is exactly zero.

Since then, Trump has gutted the refugee program that Amash’s own dad used to come to the country, slashing the annual refugee cap from 110,000 during Obama’s term to 18,000, an all-time low. But since this is within Trump’s executive authority, Amash hasn’t bothered to really protest; it’s as if only the legality of the president’s actions matter, not their morality.

Amash hasn’t just hemmed and hawed when opposing anti-immigration proposals. He’s also slapped down pro-immigration measures for unclear reasons.

Amash claims he supports the legalization of Dreamers—folks who were brought to this country as minors without proper authorization and have been here ever since with hardly any contact or time spent in their birth land. But last year he voted against the American Dream and Promise Act, which would have created a path to lawful permanent residence and eventual citizenship for Dreamers who met certain stringent conditions. If the Supreme Court this summer upholds Trump’s decision to scrap the Obama-era Deferred Action Against Childhood Arrivals (DACA) program, which handed Dreamers temporary legal status, Trump could eject them from the country en masse.

The bill never made it to the Senate, but Amash’s vote is puzzling since he criticized Obama for using his executive authority to create DACA—and then Trump, too, when he used his authority to eliminate the program. Amash urged Trump to work with Congress, yet when Congress, which has abdicated the issue for two decades, took a stab at protecting Dreamers, Amash balked, even as seven of his fellow Republicans voted for it.

Amash also voted for an amendment that prohibited funds for the Military Accessions Vital to National Interest (MAVNI) program because the program was extended to DACA recipients. This creative program, which hasn’t escaped Trump’s assaults, is the brainchild of a conservative Federalist Society lawyer who received the MacArthur Genius Grant for it. It allowed the Army to recruit legal immigrants who have skills considered to be of vital national interest and give them a path to permanent residency and citizenship. But Heritage Action, the lobbying arm of the conservative Heritage Foundation, dubbed the extension of the program to DACA holders “amnesty” and urged Republicans to vote for an amendment to defund it. That’s exactly what Amash did.

Amash also voted “no” on last year’s Farm Workforce Modernization Act after he’d quit the GOP. This bill would have expanded the H-2A visa program and allowed farmers to not just hire more foreign guest workers but to do so for the full year, instead of only seasonally. It would have also permitted undocumented aliens to obtain permanent residence if they had worked in domestic agriculture for at least 10 years and were willing to continue working in the industry for an additional four years. The bill contained an ill-advised E-Verify mandate for farmers, and that’s certainly an affront to civil liberties. But it would suggest a strange and selective punctiliousness if that’s what turned Amash against the bill, given his support for a wall, defunding sanctuary cities, and enhanced refugee vetting.

All of this (and more) has earned Amash a career score of 81 percent—a solid B+—and a recent score of 66 percent from NumbersUSA, a rabidly restrictionist outfit.

Amash’s immigration record might be heroic for a Republican, but it is tame by libertarian standards—and confusing, too. He has repeatedly tried to reassure libertarians that he intends to “earn” the party’s nomination by addressing concerns and explaining himself. If he’s serious about that, he ought to clarify where exactly he stands on an issue that is central for his new party and that is going to be a major national issue as restrictionist forces ramp up to turn Trump’s current temporary pause on immigration into a permanent one.

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Second Amendment Challenge to N.J. Gun Range Closure

From the motion for a preliminary injunction in Ricci v. Murphy (D.N.J.) (filed yesterday by Dan Schmutter of Hartman & Winnicki and David H. Thompson, Peter A. Patterson, and Steven J. Lindsay of Cooper & Kirk), which challenges the inclusion of gun ranges in the New Jersey Governor’s business closure order:

The right to self-defense is “the central component of the [Second Amendment] right,” Heller, 554 U.S. at 599 (emphasis added), and it is “a basic right, recognized by many legal systems from ancient times to the present day,” McDonald, 561 U.S. at 767. Indeed, the right to self-protection and self-preservation was viewed at the Founding as a natural right that predates government and is necessarily reserved to the people when government is established. See Heller, 554 U.S. at 593–94 (citing, e.g., 1 William Blackstone, Commentaries 136, 139–40 (1765)). The importance of the right to self-defense is shown in sharp relief in times of national emergency, such as the present pandemic, when ordinary social routines, practices, and safeguards begin to break down.

The COVID-19 outbreak, and our society’s response, have upended social life as we know it, calling into question basic governmental functions and protections that are ordinarily taken for granted. Across the country, for example, police departments have been forced to “make[] major operational changes in preparation for the continued spread of coronavirus, as they face potential strains in resources and staffing without precedent in modern American history.” Alexander Mallin & Luke Barr, Police Implement Sweeping Policy Changes To Prepare for Coronavirus Spread, ABC News (Mar. 18, 2020), https://abcn.ws/3bl7sij (attached to Schmutter Decl. as Exhibit 14).

Those measures include reducing police response to certain types of crimes and announcements that certain criminal laws will simply not be enforced at the present time. Id. Hundreds of police officers in New Jersey have already been infected by COVID-19, and thousands more have been forced to quarantine. See Alex Napoliello, 645 N.J. Cops Have Tested Positive for Coronavirus, Another 2,300 in Self-Isolation, N.J.com (Apr. 13, 2020), https://bit.ly/2ziCgT8 (attached to Schmutter Decl. as Exhibit 15). Indeed, many States—including New Jersey, as well as California, New York, Ohio, and Texas—have taken the extraordinary and unprecedented step of releasing thousands of inmates into the public, due to the coronavirus outbreak. Lucas Manfredi, Jails Release Thousands of Inmates To Curb Coronavirus Spread, Fox Business (Mar. 22, 2020), https://fxn.ws/2UtPRxG (attached to Schmutter Decl. as Exhibit 16); Tracey Tully, 1,000 Inmates Will Be Released From N.J. Jails to Curb Coronavirus Risk, N.Y. Times (Mar. 23, 2020), https://nyti.ms/3akEZJd (attached to Schmutter Decl. as Exhibit 17).

The importance of safeguarding “the natural right of resistance and self-preservation,” Heller, 554 U.S. at 594, has never been higher than during this extraordinary moment of social upheaval and unprecedented strain on government resources. Hundreds of thousands of Americans across the Nation have come to the same conclusion: “Gun sales are surging in many U.S. states, especially in those hit hardest by the coronavirus—California, New York and Washington,” Kurtis Lee & Anita Chabria, As the Coronavirus Pandemic Grows, Gun Sales Are Surging in Many States, L.A. Times (Mar. 16, 2020), https://lat.ms/39kNVNt (attached to Schmutter Decl. as Exhibit 18), with dealers reporting “an unusually high proportion of sales … to first-time gun buyers,” Richard A. Oppel, Jr., For Some Buyers With Virus Fears, the Priority Isn’t Toilet Paper. It’s Guns., N.Y. Times (Mar. 16, 2020), https://nyti.ms/39gfRCc (attached to Schmutter Decl. as Exhibit 19)….

And indeed, these are exactly the circumstances that confront Plaintiff Ricci, who acquired her handgun only in March 2020, shortly after COVID-19 began its spread across the United States. Ricci Decl. ¶ 7. She has no prior experience with firearms of any kind but believes that the current emergency necessitates that she keep a handgun in her home for self-defense. Id. ¶¶ 6, 10. But merely possessing a handgun in the home is not the same as actually being able to use it with any level of effectiveness.

As Americans across the country are demonstrating, the basic, fundamental right of armed self-defense has never been more important than it is today. And as many Americans—including Plaintiff Ricci—are purchasing firearms for the first time in their adult lives, the need for firearm training has perhaps never been more acute. EO 107’s mandated closure of all shooting ranges in the State thus unquestionably burdens conduct protected by the Second Amendment….

There’s a lot more argument in the brief, of course; you can read it here.

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Could a judge be charged with perjury for breaking a promise made during a confirmation hearing?

Chiafalo v. Washington involved the so-called “faithless electors.” During the arguments, Justice Gorsuch asked Larry Lessig, if a faithless elector could be charged with perjury for violating a sworn oath:

JUSTICE GORSUCH: Counsel, could a State, for example, ask an elector to make a sworn statement as to his present intention to vote for a particular candidate, make the pledge an oath?

MR. LESSIG: Yes.

JUSTICE GORSUCH: And could a State later prosecute that elector for perjury if that statement under oath –if there’s evidence that that was a false statement?

I chuckled at Lessig’s answer:

MR. LESSIG: In principle, absolutely, Your Honor. We think, in practice, that would be just like with a Judge making a promise to a Senate committee upon confirmation –prior to a confirmation, it would be incredibly difficult to imagine enforcing in a way that wouldn’t just be retaliatory against a particular elector.

In other words, a perjury prosecution would really be a pretext for a vote the judge cast.

Remember, promises made to Susan Collins are not enforceable.

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via IFTTT

Justin Amash’s Confusing and Contradictory Immigration Record

The Libertarian Party (L.P.) has always stuck up for mobility rights unencumbered by political barriers—in other words, for open borders. If its commitment to economic freedom has distinguished it from the Democratic Party, its commitment to the freedom of movement (along with civil liberties and reproductive rights) has distinguished it from the Republican Party. “A truly free market requires the free movement of people, not just products and ideas,” the party platform’s immigration plank declares.

So one key question for the five-term Michigan Rep. Justin Amash, a former Republican who recently joined the L.P., is whether he will advance this commitment or dilute it if he succeeds in getting the party’s presidential nomination. He called out President Donald Trump’s hateful anti-immigrant rhetoric when his erstwhile Republican comrades either stayed silent or played along. When Trump called immigrants “invaders” and contemptuously told Rep. Ilhan Omar (D–Minn.)—who emigrated from Somalia as a child—to return “home,” Amash voted in favor of a resolution condemning these comments.

But his voting record on legislation and explanations for his votes paint a mixed picture at best. Despite his well-deserved reputation as one of those rare politicians who puts principle above party or president, he’s got a maddening habit of splitting the baby when it comes to immigration. He’s certainly less restrictionist than every Republican out there right now, including even self-styled Trump nemesis Sen. Mitt Romney (R–Utah), who during his own failed presidential bid in 2012 mused about making life so miserable for undocumented immigrants that they’d “self-deport.” But notwithstanding Amash’s other virtues, he seems less pro-immigration than his libertarian rivals.

This was evident during Saturday’s L.P. presidential debate in Kentucky, when Jacob Hornberger, the founder of the libertarian think tank Future of Freedom Foundation, raved about the party’s 1990 platform that unambiguously called for the “elimination of all restrictions on immigration [and] the abolition of the Immigration and Naturalization Service and the Border Patrol.” He castigated Amash, noting that the congressman claimed to “love free enterprise” but went along with the “evil, immoral, socialist, central planning, Republican-Democratic system of immigration controls which has brought death and suffering to countless people” and resulted in a “brutal police state consisting of highway checkpoints and other initiations of force against innocent people.” Meanwhile, Jo Jorgensen, the 1996 L.P. nominee for vice president, promised to “immediately stop construction on President Trump’s border wall boondoggle, and work to eliminate quotas on immigration so that anyone who wishes to come to America could do so legally.” She asked Amash point blank if he would do the same. He refused to answer—just as he did repeated requests from Reason for an interview for this piece.

In public comments two years ago, Amash noted that it is “important” for America to remain a “welcoming country” where immigrants like his dad, a Palestinian refugee from Ramallah, “feel they have the opportunity to come and start a new life.” A few weeks ago, he told Reason‘s Nick Gillespie that he “supports immigration” and wants to “fix our immigration system so that people can come here lawfully.”

Still, when he was a Republican in Congress, he too often ended up on the pro-immigration side for narrow procedural reasons, not fundamental principled ones. Indeed, Amash repeatedly said he agreed with several restrictionist ends and disagreed merely with the means deployed to achieve them.

In a 2013 letter Amash co-signed in support of Sen. Rand Paul’s efforts to elevate the GOP’s tone on immigration (back before Paul found his inner restrictionist), Amash said that immigration reform should be treated like a “three-legged stool” that combined expanded legal immigration with enhanced border security by “both the physical border and the ‘virtual’ border of visa enforcement.” Last year, even as he became the sole Republican to join a Democratic bill to stop Trump from declaring a national emergency to seize funds to build his wall (while criticizing his fellow Republicans for trading “massive, wasteful spending” in exchange for wall funding), he assured everyone that he doesn’t “have an inherent objection to a border wall.”

As for visa enforcement, he says he’s “skeptical” of E-Verify, a program that requires employers to check whether their hires have work authorization against a federal database, because enforcing immigration laws is the government’s job and private businesses shouldn’t be asked to do it for them. But that opens the question of how far he is prepared to let the government go to do this job. Is it acceptable for the IRS to conduct audit raids (as it did under President Barack Obama) or for Immigration and Customs Enforcement (ICE) to conduct physical raids on businesses (as it did under Presidents George W. Bush and now Trump) to ferret out undocumented immigrants?

Amash’s record has also been mixed when it comes to defending sanctuary jurisdictions. Last year, he voted against the No Sanctuary for Criminals Act, a punitive law that sought to strip certain federal funds from sanctuary cities that refused to cooperate with Uncle Sam’s deportation efforts. But his objections did not center around anything morally objectionable about this particular bill, just that it went “too far.” In fact, he went out of his way to assert that in the past he had “voted to defund sanctuary cities.”

In the same vein, he voted against Kate’s Law, which was named after the California woman accidentally shot by an unauthorized immigrant who was later acquitted on murder charges. That law sought to strip immigrants accused of illegal reentry—a felony—of the right to challenge their removal order while they were being criminally tried. Amash, to his credit, noted that eliminating this right was unconstitutional. Yet he did not go so far as to question the criminalization of unauthorized entries in the first place, which should have been a no-brainer for a self-described small-l libertarian.

Among Amash’s most inspired actions as a congressman was his vote two years ago against a Republican plan to put Democrats on the spot by forcing them to vote on a resolution supporting ICE, an agency with a history of brutal border enforcement. So when Trump implemented his zero-tolerance border policies and started separating babies and other children from Central American migrant moms seeking asylum, the progressive left joined longstanding (and admittedly unpopular) libertarian calls to abolish ICE. The Republicans’ resolution tried to exploit that, praising the “heroic law enforcement officers who make sacrifices every day to secure our borders, enforce our laws, and protect our safety and security” and daring Democrats to vote against it. Amash condemned his fellow Republicans and demanded to know why a party that has historically counseled vigilance against an overweening federal government would “treat a federal agency as though its beyond reproach and reform.” But he did not go so far as to join calls to abolish ICE.

As for zero-tolerance border enforcement, all Amash could bring himself to say was that the government shouldn’t forcibly separate families seeking asylum in the United States “unless absolutely necessary.” One would be hard-pressed to find any statement by Amash noting why providing asylum was a humanitarian imperative, particularly for a nation founded by people fleeing persecution.

Also praiseworthy was Amash’s slam of Trump’s so-called Muslim travel ban in 2017, which barred entry for all refugees for 120 days and barred entry for foreign nationals from seven predominantly Muslim countries for 90 days. Even as most other Republicans stayed mum, Amash called the ban “unlawful” and “extreme.” He beseeched Trump to work with Congress if he wanted to change immigration law. But here again, Amash diluted his message by acknowledging the need for more vetting of refugees, despite the facts that refugees at the time were already being subjected to a multi-agency, multi-year review and that the number of Americans killed in a terrorist attack by a refugee since 1980 is exactly zero.

Since then, Trump has gutted the refugee program that Amash’s own dad used to come to the country, slashing the annual refugee cap from 110,000 during Obama’s term to 18,000, an all-time low. But since this is within Trump’s executive authority, Amash hasn’t bothered to really protest; it’s as if only the legality of the president’s actions matter, not their morality.

Amash hasn’t just hemmed and hawed when opposing anti-immigration proposals. He’s also slapped down pro-immigration measures for unclear reasons.

Amash claims he supports the legalization of Dreamers—folks who were brought to this country as minors without proper authorization and have been here ever since with hardly any contact or time spent in their birth land. But last year he voted against the American Dream and Promise Act, which would have created a path to lawful permanent residence and eventual citizenship for Dreamers who met certain stringent conditions. If the Supreme Court this summer upholds Trump’s decision to scrap the Obama-era Deferred Action Against Childhood Arrivals (DACA) program, which handed Dreamers temporary legal status, Trump could eject them from the country en masse.

The bill never made it to the Senate, but Amash’s vote is puzzling since he criticized Obama for using his executive authority to create DACA—and then Trump, too, when he used his authority to eliminate the program. Amash urged Trump to work with Congress, yet when Congress, which has abdicated the issue for two decades, took a stab at protecting Dreamers, Amash balked, even as seven of his fellow Republicans voted for it.

Amash also voted for an amendment that prohibited funds for the Military Accessions Vital to National Interest (MAVNI) program because the program was extended to DACA recipients. This creative program, which hasn’t escaped Trump’s assaults, is the brainchild of a conservative Federalist Society lawyer who received the MacArthur Genius Grant for it. It allowed the Army to recruit legal immigrants who have skills considered to be of vital national interest and give them a path to permanent residency and citizenship. But Heritage Action, the lobbying arm of the conservative Heritage Foundation, dubbed the extension of the program to DACA holders “amnesty” and urged Republicans to vote for an amendment to defund it. That’s exactly what Amash did.

Amash also voted “no” on last year’s Farm Workforce Modernization Act after he’d quit the GOP. This bill would have expanded the H-2A visa program and allowed farmers to not just hire more foreign guest workers but to do so for the full year, instead of only seasonally. It would have also permitted undocumented aliens to obtain permanent residence if they had worked in domestic agriculture for at least 10 years and were willing to continue working in the industry for an additional four years. The bill contained an ill-advised E-Verify mandate for farmers, and that’s certainly an affront to civil liberties. But it would suggest a strange and selective punctiliousness if that’s what turned Amash against the bill, given his support for a wall, defunding sanctuary cities, and enhanced refugee vetting.

All of this (and more) has earned Amash a career score of 81 percent—a solid B+—and a recent score of 66 percent from NumbersUSA, a rabidly restrictionist outfit.

Amash’s immigration record might be heroic for a Republican, but it is tame by libertarian standards—and confusing, too. He has repeatedly tried to reassure libertarians that he intends to “earn” the party’s nomination by addressing concerns and explaining himself. If he’s serious about that, he ought to clarify where exactly he stands on an issue that is central for his new party and that is going to be a major national issue as restrictionist forces ramp up to turn Trump’s current temporary pause on immigration into a permanent one.

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FBI Seizes Senate Intel Chairman’s Cellphone As Probe Into Suspicious Virus-Linked ‘Insider Trading’ Heats Up

FBI Seizes Senate Intel Chairman’s Cellphone As Probe Into Suspicious Virus-Linked ‘Insider Trading’ Heats Up

Tyler Durden

Thu, 05/14/2020 – 07:59

Although the public outrage over stock trades made by GOP Senators during the early days of the US coronavirus outbreak appears to have subsided, the DoJ’s investigation into the ‘controversial’ stock trades has continued apace. And in the latest update, the LA Times revealed late Wednesday that FBI agents had seized the cellphone of Sen. Richard Burr during the course of the investigation.

Burr, who is best known to Americans in his capacity as chairman of the Senate Intel Committee, reportedly turned over his phone to agents after they executed a search warrant on his home in the Washington area.

The seizure is a sign of a “significant escalation” in the investigation, the paper said.

The seizure represents a significant escalation in the investigation into whether Burr violated a law preventing members of Congress from trading on insider information they have gleaned from their official work.

To obtain a search warrant, federal agents and prosecutors must persuade a judge they have probable cause to believe a crime has been committed. The law enforcement official said the Justice Department is examining Burr’s communications with his broker.

Such a warrant being served on a sitting U.S. senator would require approval from the highest ranks of the Justice Department and is a step that would not be taken lightly. Kerri Kupec, a Justice Department spokeswoman, declined to comment.

A second law enforcement official said FBI agents served a warrant in recent days on Apple to obtain information from Burr’s iCloud account and said agents used data obtained from the California-based company as part of the evidence used to obtain the warrant for the senator’s phone.

Notably, the leak – which reads like something the NYT or WaPo would ordinarily publish – follows a federal judge’s decision to try and stop the DoJ from dismissing the charges against former Trump NSA Michael Flynn.

Was this ‘leak’ really intended to show the public that the DoJ remains non-partisan in the Trump era? We wouldn’t be surprised. But the fact remains: If these senators broke the law, they will almost certainly face charges.

Of course, Burr wasn’t the only lawmaker to get caught up in the scandal:

Others who have come under fire for stock sales include Rep Sens. Kelly Loeffler (R-Ga.) and James Inhofe (R-Okla.) as well as – what’s this? – powerful California Democrat Dianne Feinstein.

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